FBI’s Fake Token Exposes Crypto Fraud Operation

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FBI’s Fake Token "NexFundAI" Exposes Crypto Firm's Market Manipulation Scheme

Written byAaron S.,

Editor-In-Chief

Last Updated: January 28, 2025

Key Takeaways

CLS Global admitted to market manipulation after an FBI sting using a fake token, NexFundAI, to expose crypto fraud;
The company faces $428,059 in penalties, three-year probation, and a ban from US crypto platforms;
“Operation Token Mirrors” revealed wash trading schemes involving CLS Global, MyTrade MM, and 18 individuals in related cases.

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CLS Global, a cryptocurrency company based in the United Arab Emirates, has admitted to illegal activities after falling for a Federal Bureau of Investigation (FBI) operation.

The FBI created a fake cryptocurrency called NexFundAI (NEXF) to catch companies and individuals involved in fraudulent activities like market manipulation.

Acting undercover, FBI agents posed as fraudsters and asked CLS Global to inflate NEXF’s trading numbers to attract unsuspecting investors.

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CLS Global pleaded guilty to charges of wire fraud and market manipulation, as announced by the Massachusetts US Attorney’s Office on January 21.

The company must pay $428,059 in penalties and forfeit funds from accounts on platforms like Binance

$12.48B

and KuCoin

$1.2B

. It is also on probation for three years and must file annual compliance reports with the Securities and Exchange Commission (SEC) to confirm it follows the restrictions.

During the investigation, the FBI found that CLS Global had been using fake transactions, known as wash trading, to inflate trading volumes artificially. This tactic made the NexFundAI token appear more popular than it was.

The company also used automated systems to carry out self-dealing trades on platforms like Uniswap

UNI $6.58

This operation, called “Operation Token Mirrors”, was launched in October 2024. Along with CLS Global, another company, MyTrade MM, and 18 individuals were charged across related cases.

Recently, the FBI also stopped a plot to kidnap a Miami jeweler and steal $2 million in cryptocurrency. How did the case go? Read the full story.